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Why Support.com Stock Is Plunging Over 25%

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Image source: Getty Images.

What happened?

The shares of Support.com (NASDAQ:SPRT) crashed by more than 25% on Tuesday afternoon. Today’s massive losses in the meme stock extended its losing streak for the third consecutive session. With this, SPRT stock has now tanked by about 47% during this period after announcing its shareholders’ approval on its merger with Greenidge Generation Holdings on Friday last week.

So what?

Support.com has seemingly been on some retail traders’ radar for the last several months. The American customer and technical support solutions provider revealed its intention to merge with the Bitcoin mining firm Greenidge Generation in March 2021.  This news drove a sharp 115% rally in SPRT stock in March. However, the stock couldn’t hold these gains for long, as it saw nearly 39% value erosion in the next couple of months.

Nonetheless, the so-called meme stock traders became active again, as the expected closing date for Support.com’s merger deal with Greenidge came closer. That’s one of the reasons why its stock rose by about 712% in three months between June to August 2021.

Now what?

According to their latest joint press release from Monday, Support.com and Greenidge “expect the pending merger to close and become effective at the close of trading on September 14, 2021.” Starting Wednesday, Greenidge common stock is expected to start trading on the NASDAQ under the ticker symbol “GREE.”

After its listing on the NASDAQ, Greenidge expects to become the only American publicly listed Bitcoin mining company with its own power source. While some investor rights law firms have raised questions on the merger in the last few months, it’s aimed to accelerate Greenidge’s growth in the coming years by expediting its path to public markets.

Overall, it’s still difficult to predict if the deal would make Greenidge stock worth buying after its listing on the NASDAQ tomorrow. It is even more so for conservative investors, because they may not want to invest their hard-earned money in a Bitcoin-mining firm without analyzing its long-term growth prospects — especially after it just got merged with a firm that has been targeted by meme stock traders lately, making the stock extremely volatile.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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